Classification of Trust
No attempt has been made to define charity in its legal sense; what Lord Macnaghten did in
*_Commissioners of Income Tax v. Pelmsel_* was to provide a classification of charitable trust in the
context of the statute of Elizabeth and other judicial decisions premised upon the statute.
The classification are of four types namely: relief of poverty, advancement of education, advancement
of religion and other purposes beneficial to the community which does not fall under any of the
preceding classifications.
*Relief of Poverty:* Poverty in this sense does not refer to terms of lacking or destitution as it refers to
some sort of kind, short of ordinary human requirements. It may be determined by reference to the
general standard of a profession or class or a section of the community and it is sufficient if the
beneficiary of such a gift is in need.
Accordingly, in *_Re Scarisbrick_* a gift for the poor relations for the donor was held to be charitable.
Similarly, gifts for the benefit of the widow and the children of the deceased ex-employee of a firm, a
gift for the encouragement of poor emigrants, a gift for the poor families of a firm and a gift for ladies of
limited means were held charitable.
This therefore means that what is required is for the individual to be in a difficult circumstance or
situation as to be unable to maintain a modest standard of living. For a trust of relief of property to be
valid, it is important that all the objects should fall within the designation “ *poor* “
Therefore, in *_Re Sander’s Will Trusts_* a gift for the “working classes” was held invalid as a gift for the
relief of poverty as the phrase “working classes” does not necessarily mean poor persons. However, if
the gift had been made to the members of the “working classes” who were aged or who were widows,
trust for the relief of poverty would then be valid. Gifts made to people who are specifically referred to
in the Statute of Uses 1601 such as aged and impotent are necessarily charitable without proof that the
objects are indeed charitable.
Advancement of Education*
Education here is beyond formal teaching and learning but also extends to the promotion of arts and
improvement of a useful branch of human knowledge. The benefit of public benefit is reflected in the gift and
the gift must be for the purpose of the advancement of some educational purpose In the case of RE:
DUPREE’s DEED TRUST (1945) Ch. 16, the court upheld a trust for chess playing among boys and youth as a
charitable trust under Advancement of Education also, gifts for educational trust funds, public libraries, gift for
the support of zoological gardens[1] are charitable trust
Gifts for the advancement of political education in association with a political party is not a charitable trust.
ADVANCEMENT OF RELIGION
Religion is defined thus: any for of monotheistic theism will be recognized as a religion. Religion requires
spiritual belief, a faith and recognition of some higher unseen power which is entitled to worship. It may include,
but it is greater than morality or a recommended way of life.
Thus, the court will neither enquire into the value of the religion nor will it consider numerical strength of the
followers provided the religion into existence. Religion includes Christian and non-Christian religion. Many
religious purposes have been held to fall within this head. This head covers any religion in so far as it is not
contrary to public morality.
In Fatumola v. Ogundimy, it was held that in order to qualify as charitable trust, it is an essential element that
they should benefit the public at large and not a section of it and not only members of a religious sect. Trusts
held to be charitable under this head include the following: trust for mission work, trust for God’s work, trust for
the increase of salaries of the clergy. Trust for the fitting of a stained glass window in a church, trust for a
church choir, trust for all the graves in a churchyard, but a trust for the upkeep of only one or selected graves is
not charitable.
In Gilmour v. Coats, it was held that the element of public benefit is essential to the validity of a religious trust
for the purpose of charity. Thus, in Iyanda v. Ajike, the testator directed his trustees to let one of his houses and
use the income for the maintenance and upkeep of a ‘mosque’ attached to the family house. The so-called
mosque to be a private prayer room attached to the testotor’s family house. There was no suggestion that the
public would be admitted to the room; in fact, there was no doubt that it was intended by the testator to be used
as a private family mosque in a private house.
It was held that trust was not charitable as it lacked the necessary element of public benefit and Baker S.P.J
said: “religious purposes are charitable only when religious services tend directly or indirectly towards the
instruction or edification of the public.”
Other purposes beneficial to the community
This expression is vague, but it must not be taken to include every object or general public utility. The
object must come within the spirit and intendment of the statute of Elizabeth. It is the residuary
category in lord machnaghten’s classification and includes a variety of trusts.
It is impossible to define or delimit accurately the extent of this category of charitable
trust. Examples of trusts held charitable under this head are ; 1 Provision of hospital
2 provision of fire brigade
3 protection and benefit of animals
4 provision of prizes for sport in an army regiment
According to professor Jegede, it is a group of charitable purposes which cannot conveniently fit in into
any of the three enumerated heads of charitable in pemel’s case. It is somehow blanket, residuary as
well as omnibus and amorphous in contents, in that it accommodates all conceivable public purposes
CY-PRES DOCTRINE
Cy pres doctrine is a legal concept that gives courts the power to interpret the terms of a will, gift, or
charitable trust. This doctrine will become active if the intended wishes or conditions of the original
document cannot be carried out, be legitimately interpreted literally, or legally performed. Cy pres gives
the court the flexibility to understand the perceived intent of the donor or testator and implement their
wishes.
The term has its origin is an old French phrase, cy pres comme possible which, in translation, means “as
near as possible.” Cy pres allows the wishes of the creator of a charitable trust, gift, or will to be carried
out in many cases. If it were not for this power, there would be instances in which the phrasing in the
document would make it null and void, legally, and thus impossible to implement.
If a private trust is initially ineffective or subsequently fails there is a resulting trust for the settlor.But if a
charitable trust is initially implosive or impracticable or subsequently becomes so in many cases the
trust will not fail and the court will apply the property cy-pres i.e apply it to some other charitable
purpose “as nearly as possible” resembling the original trust.However it must be shown that the settlor
or testator has a general charitable intent before the property can be applied cy-pres. What constitutes
a paramount general charitable intent has not been determined by courts but in RE DAVIS,it was held
that the inclusion of the gift in question by testator among other gifts which are charities is an indication
of the intent.
Note that a property may not be applied cy-pres where the donor describes with particular care a
particular charitable institution and make the gift to that institution;if the institution is in existence at
the date of the death but it is dissolved before distribution,the gift passed to state which will apply cy-
pres as of clemency. For the cy-pres doctrine to apply two basic requirements must be satisfied.
Firstly that it is impossible or impracticable to carry out the purposes of the trust and secondly that the
donor sufficiently manifested a general charitable intention.
IMPOSSIBILITY OR IMPRACTICABILITY (UNDER CY PRES DOCTRINE)
For the CY PRES doctrine to apply two basic requirements must be satisfied;
• That it is impossible or impracticable to carry out the purpose of the trust
• That the donor has sufficiently manifested a general charitable intention
The word impossibility for the purpose of this doctrine include circumstances which may be difficult to
reconcile with ordinary meaning of the word.56
In DA COSTA V DE PAS,57trust directed for the establishment of an institution for the instruction of
people in the JEWISH RELIGION failed because at that time, the purpose was illegal.it therefore became
impossible to carry out the purpose of the trust. Similarly it became impossible to carry out trust which
purpose was for redemption or British slave in turkey where British slaves did not exist.56
In RE DOMINION STUDENTS HALL TRUST, the memorandum of a charitable association expressly
restricted to the benefit of charity to common wealth student of EUROPEAN ORIGIN. The trustees in
1947 sought to delete the word ‘EUROPEAN ORIGIN’ so as to enable other common wealth students of
NON-EAUROPEAN ORIGIN to benefit. The application was granted and CY PRES power as used to remove
the clause.60
However CY PRES DOCTRINE does not give power to re-write or remake the original valid trust and
where it is applied, it must be for the subject as near as possible to that intended by the donor.
GENERAL OR PARAMOUNT CHARITABLE INTENTION
General charitable intention must be shown before a gift can be transferred to another recip-ient. A
proposed transfer of the gift to another recipient is called a ‘scheme’. In Re Lysaght,8 Buckley J defined
general charitable intention as:
A paramount intention on the part of the donor to effect some charitable purpose which the court can
find a method of putting into operation, notwithstanding that it is impracticable to give effect to some
direction by the donor which is not an essential part of his true intention — not, that is to say, part of his
paramount intention.9
If a general charitable intention can be found, another charitable recipient can receive the gift provided
their charitable objects are broadly the same as the original recipient intended by the testator.
AN ILLUSTRATION:
Suppose Scott Leaves £100,000 in his will for the advancement of education at Rose Gate School. Rose
Gate School closed before Scott’s death but after he wrote his will.
The gift would be charitable as it is for the advancement of education under s 3(1)(b) of the Charities Act
2011 and it is for the public benefit.
As the school has closed, the gift cannot be administered by Scott’s trustees in the manner anticipated
by Scott. Whether the gift can be applied cy-près to another similar institution depends on whether
Scott displayed a general charitable intention in his will.
If it could be shown that Scott intended to benefit educational charity in general, then the gift could be
applied cy-près
Buckley J also emphasised that general charitable intention did not mean that the testator could only
leave an original gift which benefited either ‘charity’ in the most general terms or one particular head of
charity again in general terms. ‘General’ is used in contrast to a particular set of instructions being given
so that the gift can only be administered in a certain way. Provided no set of instructions was given by
the testator, it can usually be said that he had a general charitable intention.
General charitable intention can be demonstrated by the donor or under the provisions of s 62 of the
Charities Act 2011.
General charitable intention must be considered in two situations: (i) subsequent failure and (ii) initial
failure.
Subsequent failure occurs when the gift fails after the testator has died but before his estate (property)
is distributed. This is, of course, usually a comparatively short period of time.
Initial failure covers a much wider timescale. It occurs where the recipient of the gift had ceased to exist
at the date of the testator’s death but was still in existence when the testator wrote his will.
The decision of the Court of Appeal in Biscoe v Jackson12 is one of the earliest which shows this
distinction between a general purpose and a particular recipient.
The decision of the Court of Appeal in Biscoe v Jackson12 is one of the earliest which shows this
distinction between a general purpose and a particular recipient.
Joseph Jackson left £10,000 in his will to his trustees to establish a soup kitchen and cottage hospital in
Shoreditch, London. Unfortunately, no land could be found in Shoreditch to establish either the hospital
or soup kitchen. The issue was whether a cy-près scheme could be ordered to vary the gift.
The Court of Appeal held that the testator had shown a general charitable intention by his gift. Cotton LJ
explained that the testator had shown a general intention to benefit the poor and sick of Shoreditch.
The testator had simply pointed out how he wished the gift to be effected: by the creation of a soup
kitchen and hospital.
If, therefore, the testator has shown a charitable intention with simply a desire as to how that should be
carried out and it is impossible to accede to the testator’s desire, a cy-près scheme can alter the
mechanism suggested by the testator to implement his gift for a similar charitable purpose.
The rules relating to perpetuity.
Perpetuity period is a life in being plus twenty-one years. Property must vest within the perpetuity
period. The capital of a private trust may not be rendered inalienable for longer than perpetuity period.
Any attempt to create a trust and to apply the income of that trust to some private purpose in
perpetuity will fail, but if the purpose of a trust can be rendered perpetually inalienable. In Re Mariette,
a trust providing for an annual prize out of an income of a trust property for sport in a school is not
against perpetuity period even though it is for an indefinite period.
Similarly, any future interest in property, which is capable of vesting after the perpetuity period, is
void. There are instances when the property may not vest within the perpetuity period and yet the trust
may not offend the perpetuity period. If there is a gift over from one charity to another charity, the gift
is void because it does not effect within the perpetuity period
Advantages of charitable trusts
1. Unlike a private trust, a charitable trust will not fail for uncertainty of objects.
2. A purpose trust will be valid if it is charitable, if not, it is generally void being of trust of imperfect
obligation.
3. Charitable trusts are exempted from the rule against perpetual trusts/ perpetuity.
4. Charitable may be exempted from income tax on rents, interest, dividends and annual payments
provided that the income is applied for charitable purpose only.
The same rules which apply to charitable trust, apply to private trust. Certain distinctions however exist.
While a private trust has certainty of words and certainty of subject matter and will fail if the object of
the trust are uncertain, a charitable trust with certainty of words and subject matter will not fail for
uncertainty of object for in that case, the court will direct a scheme for the application of the property.
This applies only if the purpose is exclusively charitable. If the purpose is not exclusively charitable in the
sense that the property can also be applied for purposes which are not charitable, the trust fails for
uncertainty of object. In Re Diplock, a trust for charitable or benevolent purposes was held not
charitable, similarly, a trust for a charitable or philanthropic, charitable or deserving, charitable or
patriotic are not charitable because the property can be used for charitable and non charitable object
and are therefore not exclusively charitable.
